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Banks paid N71.6bn to AMCON as ‘sinking fund’

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Nine Deposit Money Banks (DMBs) in 2015 paid the sum of N71.6bn to the Asset Management Corporation of Nigeria (AMCON) as sinking fund, data gathered by Business247 has shown.

Effective January 1, 2011, DMBs in Nigeria were required to contribute 0.3per cent of total assets as at the preceding year end to AMCON’s sinking fund in line with existing guidelines.

This was increased to 0.5per cent in 2013. The contribution to AMCON is a levy on all deposit money banks in Nigeria.

It is non-refundable and does not represent any ownership interest nor does it confer any rights or obligations   (save to pay the levy) on the contributor.

Data gathered by our correspondent from these Banks financial statements for the year ended December 2015, shows an increase of nearly 13 per cent from N63 billion paid by the same DMBs in 2014.

Zenith Bank paid the highest of N17 billion or 18.9 per cent increase from N14.39 billion, followed by Access Bank Plc that paid N9.9 billion to AMCON, an increase of 16.3 per cent from N8.5 billion recorded in 2014.

A Tier II Bank, Sterling Bank AMCON expenses moved to N 4.1 billion, up by 16.1 per cent from N3.6 billion in prior year.

Another Tier II Bank, Wema Bank AMCON expenses in 2015 stood at N1.9 billion, an increase of 15.1 per cent from N1.67 billion in 2014.

Also, First City Monument Bank which has N1.6trillion as total assets in 2015 contributed N5.7 billion to AMCON from N4.9 billion,

Guaranty Trust Bank paid N10.6 billion from its total assets in 2015 as against N9.5 billion in 2014, an increase of 14.6 per cent while Fidelity Bank AMCON expenses rose by 9.8 per cent from N5.4 billion to N5.9 billion in 2015.

Others are United Bank for Africa Plc and Union bank of Nigeria Plc that recorded a growth of 5.5 per cent and 4.4 per cent growth in AMCON expenses.

United Bank for Africa AMCON expenses moved from N11 billion to N11.69 billion in 2015 while Union Bank of Nigeria recorded N4.6 billion in AMCON expenses from N4.4 billion in 2014.

The banks’ chief executives had, at the monthly bankers’ meeting in August 2013, signed a resolution called Trust Fund Deed between them and AMCON where they agreed to contribute 0.5 percent of total assets and 0.5 per cent of 33 per cent of their off balance sheet items to the sinking fund.

The fund is to serve as a safety net for AMCON to ensure that it meets its obligations arising from debt securities issued by it and to insulate the tax payer from obligations occasioned by financial mismanagement by the banks.

The Corporation in March this year had admitted that admitted before an investigative panel of the House of Representatives that its debt profile had risen to N6.6 trillion courtesy of accumulated interest payment of N2.1 trillion.

The House ad-hoc committee, headed by Albert Abiodun Adeogun, investigating the sale of banks by AMCON, had  raised eyebrows at the rise in liabilities, particularly as AMCON owed the CBN N4.5 trillion.

The committee stated that it heard that the CBN was closely monitoring and supervising AMCON to ensure that its liabilities were cleared by the time the corporation was expected to be wound down in 2024.

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35 thoughts on “Banks paid N71.6bn to AMCON as ‘sinking fund’”

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